The opinion of the court was delivered by: Per Curiam
On appeal from the Superior Court, Appellate Division, whose opinion is reported at 313 N.J. Super. 79 (1998).
This appeal concerns liability coverage under an automobile insurance policy. The facts of the case are set forth in the reported opinion of the Appellate Division, 313 N.J. Super. 79 (1998). We repeat only the facts necessary to our Disposition.
Twenty-nine-year-old Joseph Collins had planned to attend a concert with his wife, Rhonda. When they realized that their car had bad brakes, the couple decided to go to the home of Joseph's mother to borrow a car owned by Joseph's stepfather, James Spataro, and used principally by Joseph's mother, Doris Spataro. The car was insured by Rutgers Casualty Insurance Company (Rutgers). When the Collinses arrived, the Spataros were not home. Joseph, however, found the keys to the car, a Toyota Camry, in the Spataros' bedroom and gave them to Rhonda. The Collinses then departed from the Spataros' residence for the home of Joseph's cousin, Paul Spataro. Rhonda drove the Spataros' car while Joseph drove the car with bad brakes, even though his license had been revoked. Upon arriving, they decided to leave the car with the bad brakes at the cousin's house. After Rhonda gave Joseph the keys to the Camry, Joseph drove the couple to the house of Rhonda's brother, Vincent Iovino. They took other means of transportation from the Iovino home to the concert. After the concert, the Collinses decided that Joseph would drive the Camry because Rhonda was too tired. During the ride home, the Collinses were in a one-car accident in which Rhonda, who had fallen asleep in the back seat, was killed.
The Estate of Rhonda Collins (the Estate) filed suit claiming compensation for damages arising out of the accident. Rutgers and the Estate each filed declaratory judgment actions seeking a determination of coverage available under the Rutgers policy. The three actions were consolidated.
The liability provision of the policy states in relevant part:
"A. We will pay damages for 'bodily injury' or 'property damage' for which any 'insured' becomes legally responsible because of an auto accident. . . . ."
"B. 'Insured' as used in this Part means:"
"1. You or any 'family member' for the ownership, maintenance or use of any auto . . . ."
"2. Any person using 'your covered auto.'"
A provision of the policy, A.8, excludes from liability coverage any person "[u]sing a vehicle without a reasonable belief that that person is entitled to do so." The unrelated A.6 exclusion of those engaged in an auto-related business, however, specifically excepts the insured or any "family member" from being deprived of coverage.
At trial, the testimony differed concerning whether Rhonda or Joseph had permission to drive any of the Spataros' vehicles. In its opinion, the trial court initially asserted that the "principal issue to be determined herein is whether Joseph Collins and/or Rhonda Collins his wife, had permission to drive the Camry of Doris and James Spataro . . . [on the day of the accident.]" Although the court framed the issue in terms of permission, it stated that under the test set forth in St. Paul Insurance Co. v. Rutgers Casualty Insurance Co., 232 N.J. Super. 582 (App. Div. 1989), the "question is whether the person using the vehicle, (here Joseph) has a `reasonable belief['] that (he) was entitled to do so."
The trial court concluded that Joseph had "no reasonable belief that he was entitled to use the vehicle either on his own or by giving the car to his wife who later `allowed' him to drive." Consequently, the court entered judgment in favor of Rutgers.
A divided panel of the Appellate Division reversed the judgment of the trial court and remanded for further fact-finding concerning whether Rhonda had a reasonable belief that she was entitled to use the Camry and whether Joseph could be considered a family member. According to the majority, if Rhonda had a reasonable belief that she had permission to use the car, Joseph would be covered under that initial permission (assuming he were a family member). The court also found that the A.8 exclusion for "any person" who did not have permission to drive the car was inapplicable to family members. The court explained that "a reasonable expectation of an insured is that family members will be protected when operating a covered family vehicle even in the absence of permission, the family member's disobedience being a family matter to be dealt with internally." 313 N.J. Super. at 89. The Dissent found that the trial court had already made the factual determination that neither Joseph nor Rhonda had a reasonable belief that either was permitted to ...